Daily FX Trading Update: AUD Down on Negative CPI – Apr 28, 2016

USD
The US dollar had a volatile time during the FOMC statement even though the Fed decided to keep interest rates unchanged as expected. The Fed removed their reference to global financial volatility posing risks but downgraded their assessment of growth and inflation. Fed Chairperson Yellen didn’t include any hints on a potential June move. The US advanced GDP reading is due today and a 0.7% expansion is eyed, half of the previous 1.4% growth figure.

EUR
The euro had a mixed performance, as it acted mostly as a counter currency. Data from the euro zone was better than expected, with the German GfK consumer climate index rising from 9.4 to 9.7 and outpacing the consensus at 9.5. German and Spanish flash CPI readings are due today, along with Spain’s unemployment change report.

GBP
The pound took a break from its strong rallies even though UK data came in line with expectations. The preliminary GDP reading showed a 0.4% expansion as expected, slower than the earlier 0.6% growth figure. Only the Nationwide HPI is due from the UK today.

CHF
The franc was stuck in consolidation to the dollar but was able to rake in some gains against its other forex rivals. The Swiss UBS consumption indicator rose from 1.45 to 1.51 to show a pickup in activity. There are no reports due from Switzerland today.

JPY
Yen pairs are moving sideways ahead of the BOJ interest rate decision, especially since the FOMC and RBNZ sounded more downbeat than usual. Several market watchers are expecting additional easing measures or lower deposit and lending rates. Earlier today, Japanese reports came in mixed as household spending slumped 5.3% while retail sales showed a smaller than expected 1.1% drop. Preliminary industrial production also beat expectations with a 3.6% gain.

Commodity Currencies (AUD, NZD, CAD)
The comdolls had a mixed performance as the Aussie slumped on a negative quarterly CPI reading while the Kiwi rallied from the RBNZ decision to keep rates unchanged. RBNZ head Wheeler highlighted downside risks and cited that further Kiwi depreciation might be appropriate. There are no top-tier reports from the comdoll economies today.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.

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